The biggest tech companies are keeping the stock market humming despite spiraling oil prices and interest rates. The rally will be tested.

Stocks followed up a torrid spring with more-muted gains in the third quarter. Rates are poised to rise further as the year draws to a close, challenging the market's resolve and its chances at an unusual feat: a fourth-straight year of double-digit gains.

But for the time being, big tech has held firm. Microsoft, Meta, Nvidia and Apple all ended the quarter with gains of more than 10%, lifting the Nasdaq composite by 2.5%. The tech-heavy benchmark closed a record high on Sept. 22. The S&P 500 rose 2% in the face of a relentless bond selloff.

Even though higher yields translate into higher borrowing costs across the economy, investors are betting that tech companies will keep borrowing and investing at a breakneck clip to chase skyrocketing demand for AI tools.

"As long as the AI trade is working, given the makeup of the big indexes, you can have a positive quarter," said Ross Mayfield, investment strategist at Baird.

Strong earnings reports also helped bolster investors' confidence. Microsoft reported robust cloud growth and increasing AI subscribers and Nvidia's finance chief predicted 70% revenue growth in the company's 2028 fiscal year. Meanwhile, software rebounded as investors backed away from the idea that AI would replace software as a service in a so-called SaaS-pocalypse. Salesforce ended the quarter up 47% and Workday up 56%, though both are still down on a year-to-date basis.

Bitcoin, the world's largest cryptocurrency, rose 42% for its best quarter since the last three months of 2024.

Rates and energy prices weighed on other parts of the market, denting consumer spending and leading the Dow Jones industrials to a quarterly decline of 2.7%, or 1413 points.

An equal-weighted version of the S&P 500, where tech companies' larger market value doesn't cause them to have an outsize impact on performance, fell 2.3%, snapping a five-quarter winning streak. The Russell 2000, which is generally made up of smaller, non-tech stocks, fell 7.5%.

"Bonds, real-estate investment trusts and consumer [discretionary] got smashed," said Jay Hatfield, chief executive at Infrastructure Capital Advisors.

The 10-year U.S. Treasury yield ended the past three months with its largest quarterly gain since 1994, notching a rise of nearly 0.9 percentage points. On Wednesday, the last day of the quarter, the 10-year touched a 24-year high.

The Iran War is the biggest culprit. Brent crude futures rose 42% to $103.53 this quarter.

Cboe Global Markets wrote in a research note in September that the correlation between oil prices and the 10-year Treasury yield is now higher than it has been at any point since the First Gulf War in 1990.

After September's rate hike, investors are projecting a roughly 60% chance of at least four more rate increases over the next 12 months according to CME data. Fed officials penciled in at least one more increase this year.

Still, that may not be enough to drag down a resilient market, said Mayfield. "Twenty-five basis points here and there on rates are not going to stop the freight train that is AI," he said.

Investment in data centers and related artificial-intelligence infrastructure is projected to total $10.3 trillion from 2025 to 2032, the yearly equivalent of 3.6% of gross domestic product, according to a recent study published by the Brookings Institution.

On Wednesday, the Nasdaq composite gained 0.2% and the S&P 500 ticked down 0.3%, while the Dow industrials slid 0.9%.

The S&P 500 and the Nasdaq are still on track for their fourth year in a row of double-digit gains for the first time since the late 1990s. The Dow, after three years of double-digit increases, is setting a slower pace in 2026, rising 5.9% through the end of September.

"The first half of the year was about market breadth," said Rob Haworth, senior investment strategist at U.S. Bank. "We've seen the breadth walk back. But we've seen the AI story, which is what makes up a lot of tech and communications services, move back to the forefront."

Over the coming quarter, investors will be closely watching inflation and jobs data for clues as to how soon and how much Fed officials will want to raise rates, Haworth said.

The question on many minds, said Rebecca Venter, senior fixed income client portfolio manager at Vanguard, is: "What will the hiking cycle need to look like for the Fed to meet its goal?"